Stanza allows users to read e-books in the "epub" format, which is an open standard supported by the International Digital Publishing Forum that many publishers use to create e-book files. Amazon.com's Kindle does not support the format, but Sony Corp.'s competing Reader device — which sells for $300 or $400 depending on the model — does.

Users of Apple Inc.'s iPhone and iPod Touch devices can use Stanza to download more than 100,000 books and periodicals to their phones, and Stanza desktop lets users read e-books on their personal computers. Lexcycle said that more than one million users downloaded Stanza between mid-July and Dec. 31.

Seattle-based Amazon started selling the Kindle electronic reading device in late 2007 and in February of this year launched the latest version of its $359 e-book device, Kindle 2. The company's online Kindle Store now includes more than 270,000 books and other reading material. It also recently rolled out free Kindle functions to iPhone and iPod Touch users to read the same electronic books that Kindle owners can buy on Amazon.com.

However, unlike Stanza, Amazon's iPhone app lacks an e-book purchasing feature. Users must access the Web browser on their iPhone, iPod or computer to buy the books.

Lexcycle was founded in early 2008 and has offices in both Austin, Texas and Portland, Ore.

"It has been an amazing experience to see Stanza grow out of our brainstormed ideas into one of the most downloaded iPhone applications," said Lexcycle founder Marc Prud'hommeaux in a statement on his company blog. "We are not planning any changes in the Stanza application or user experience as a result of the acquisition."

Calls to Amazon.com seeking comment weren't immediately returned late Monday.